The UK’s first International Investment Summit was opened yesterday (14 October) by prime minister Sir Keir Starmer, who said it was an early step in his government’s goal to re-establish the UK as an “open, outward-looking, confident, trading nation”.
Emphasising the importance of stability for investment, Starmer said:
“It’s not just that stability leads to growth — it’s also that growth leads to stability.”
His appearance at the summit coincided with the announcement by the government of £63bn in private sector investment, £6.3bn of which is to be invested in new data centres.
‘Rip up’ bureaucracy
The FT noted yesterday (14 October) that the PM said he would “rip up” regulation that stymies growth in a bid to stoke the “shock and awe of investment”. He argued that “the key test of regulation is, of course, growth” and told business leaders that “you have to grow your business, I have to grow my country”.
“We will rip up the bureaucracy that blocks investment, and we will make sure that every regulator in this country, especially our economic and competition regulators, takes growth as seriously as this room does.
“We have a golden opportunity to use our mandate, to end chop and change, policy churn and sticking plasters that make it so hard for investors to assess the value of any proposition.”
International investor Anders Opedal, CEO of Norwegian energy company Equinor, said that the government was “putting forward a very good strategy for how to improve, working together with the private sector, now it is about execution and getting execution right,” according to the BBC.
Industrial strategy
Starmer also insisted that the government’s new industrial strategy, detailed in a green paper launched yesterday, would direct government funding towards cutting-edge industries.
Chartered Institute of Export & International Trade director general Marco Forgione said that he was “optimistic” that the strategy would be “unequivocal, long-term and will be supported by a comprehensive trade strategy”.
Starmer also defended his government’s approach to business and workers’ rights, following concerns from some firms that a new package of protections for workers could affect UK competitiveness.
Some businesses had raised concerns about the impact of the worker’s rights package, saying that it could be a “burden” for firms.
The PM argued that “workers with more security in work, higher wages, is a better growth model for this country”, providing greater stability and disposable income.
Reeves speaks
Chancellor Rachel Reeves also spoke at the summit, saying that she was “determined to get the balance right in the Budget”, which she is set to deliver on 30 October.
The FT reports that Reeves did not rule out an increase in National Insurance contributions for employers, noting that the Labour manifesto at the recent general election only explicitly ruled out increases in taxation for “working people”:
“Unless you put Britain on a stable economic financial path, we’re not going to be able to get that investment in. That means there will be some difficult decisions, including on taxation. Businesses get that.”
The chancellor also restated the government’s commitment not to raise corporation tax above 25% for the duration of the current Parliament, though insiders cited by the FT say that she is considering a hike in capital gains tax.
Speaking to Bloomberg, Starmer said speculation that capital gains tax could increase to as much as 39% from the current 28% rate was “getting to an area which is wide of the mark”.
New minister
Ahead of the summit, the government has appointed a new minister for investment, Poppy Gustafsson.
Gustafsson is the founder and former CEO of cybersecurity firm Darktrace, and the government noted her “extensive” experience in business, finance and cybersecurity as it announced her new role.
Starmer said of the appointment that Gustafsson is “an accomplished entrepreneur who brings invaluable experience” to government.
“We’re upgrading the Office for Investment to ensure it is fit for purpose and has the capability it needs to make the UK the first choice for investment and the best place in the world to do business, which is central to our mission to drive growth and make people better off.”
Business and trade secretary Jonathan Reynolds said:
“Her private sector expertise will be vital in ensuring we attract more valuable investment into Britain and these changes show this government’s growth mission will prioritise what businesses need to thrive in the UK and boost our economy.”